Georgia Divorce: What to do When a Spouse Drains Bank or Financial Accounts

Posted on Jan 14, 2017 10:10am PST

Often, our clients report that the final straw in the build-up of a decision
to seek a divorce occurs when the other spouse begins draining or diverting
bank or financial accounts or other assets (hereinafter “bank accounts”).

If the accounts being drained are
separate accounts, the only way to formally put a tourniquet on the hemorrhaging
is to use the automatic Mutual Restraining Order (MRO) that accompanies
any divorce action in Georgia (as directed by each county’s Superior
Court). [Note that an MRO which is entirely different than a Temporary
Protective Order issued in cases of domestic violence or stalking allegations.]
Every MRO in a Georgia divorce action will contain a provision that prohibits
either party from disposing, trading converting, selling, assigning or
otherwise removing any of the property belonging to the parties. This
provision, of course, covers the diverting of funds from financial and
bank accounts. Because separate accounts and joint accounts are both considered
marital property (with some slight exceptions as when the separate account
is completely funded with pre-marital funds, for example), a spouse in
a divorce case in Georgia is – as a result of the binding MRO --
legally prevented from removing or diverting funds from his or her separate account.

An MRO applies to the other spouse only after a divorce (or separate maintenance)
action is filed
and then served on the opposite spouse. But, because the MRO will apply to
the filing spouse immediately upon filing, the filing spouse should remember
that he/she will be prohibited (except as explained below) from removing
funds from a separate/joint account once that spouse files. So, important
financial consideration should be taken before a spouse files for divorce
if he/she intends to divert any funds.

One very significant provision that applies to Mutual Restraining Orders
in the context of financial and bank accounts is that removal of funds
from a bank account (separate or joint) is
not prohibited if done in furtherance of the “ordinary course of business.”
Exactly what constitutes “ordinary course of business” is
not clearly defined in Georgia, but taken at its plain meaning, the term
broadly allows for funds to be removed and used for traditional household
and family expenses that have been typically incurred to finance household
expenses up to the point of the divorce filing. Typically, payments for
to an attorney in a divorce of family action for reasonable attorney fees
will be considered an expense in the ordinary course of business.

As stated above, the MRO will also prevent dissipation and funds removal
from a joint account. The opportunities to limit dissipation of funds
from a joint account are more widespread, however, than in the case of
joint accounts. If a spouse becomes concerned about his/her spouse draining
joint bank accounts, it is perhaps advisable for the concerned spouse –
before a divorce is filed -- to withdraw half of the funds in any joint
accounts and place them in a separate account. A decision to do this should
really only be made in consultation with a lawyer, but this is a surefire
way to ensure that there will not be spousal overreach in removal or dissipation
of funds. Note, however, that many married couples pay bills out of one
or more of their joint accounts, and as such, careful thought must be
given about how ACH or automatic bill-pay will be handled as well as how
other family expenses will be paid for if half of the joint bank balance
is withdrawn.

Nonetheless, by depositing half of the joint account(s) balance in a separate
account, a spouse can stem the tide of account-draining and effectively
make half of the account balances inaccessible to a spouse’s would-be
efforts to drain accounts, overspend or otherwise remove funds
not in the ordinary course of business. It is essential for a spouse who follows
this course to keep in mind that the funds now deposited in a separate
account should remain frozen by that depositing spouse so that the depositing
spouse expends funds from that new separate account
only to the extent such expenditures are necessary in the ordinary course of business.

It should go without saying that it is critical for anyone confronting
a divorce or potential divorce to hire an experienced lawyer. There are
many, many concerns that need to be fully considered and balanced out
in a divorce case, whether the issue involved account-draining, parenting,
custody, support, asset division, debt division or otherwise. While it
is true, that good lawyers are not inexpensive, the consequences of trying
to handle a divorce without a good lawyer can be devastating.

At Fox Firm, P.C., we take pride in our client-centric, results-oriented
philosophy and have earned the trust of hundreds of clients in our 22
years in practice, whether the case is in Gwinnett County or elsewhere
in metro Atlanta and the State of Georgia. Please feel free to contact
us at 770.277.4883 if you are confronted with divorce or other family
law matters and feel compelled to hire good attorneys. You can also reach
the firm via email at dnfox@foxfirmpc.com.

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The information on this website is for general information purposes only.
Nothing on this site should be taken as legal advice for any individual
case or situation. This information is not intended to create, and receipt
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